America Online has agreed to buy Advanced Network & Services, which helped create the backbone of the global Internet computer communications network, for $35 million.
America Online plans to pay $20 million in cash and the rest in stock in the deal, expected to close by Jan. 31.America Online said the acquisition reflects its strategy to make it the market leader in the on-line market and pledged that subscribers will be able to access the service at speeds of 14.4 kilobytes per second and 28.8 kilobytes per second in the first quarter at no extra charge.
ANS provides private data network services, Internet access, network security and related services to major businesses and carries daily traffic of more than 3 billion "packets" of data. It operates on more than 12,000 miles of leased fiber-optic circuits.
"We've been impressed with the success ANS has had in creating the Internet backbone and, more recently in deploying and operating private networks," said Steve Case, president and chief executive officer of America Online.
"Together, we plan to pursue new opportunities to improve ANS's positionin the business-to-business internetworking market, strengthen AOL's position in consumer online services, and take the lead in popularizing the Internet."
America Online said it has expanded its agreement with Sprint, which handles about 80 percent of its traffic, to include high-speed access.